Ask Indonesians about a bad experience in medical care and each will have a story to tell. The poor state of Indonesia’s healthcare system has turned ‘improving quality’ into the top priority of the government of Indonesia. Better quality of care has become especially important as the fourth most populated country in the world moves into full traction with its plans to achieve universal health care coverage.

According to the country’s Ministry of Health, 72 percent of the population, just over 176 million Indonesians, was already part of some type of health financing scheme. Now Indonesia’s policymakers are committed to covering every citizen by 2019. The implementation of universal healthcare coverage will start in January 2014 and is widely seen as a significant step forward for Indonesia’s 238 million people.

Badan Penyelenggara Jaminan Sosial, BPJS as the system is called locally, aims to drastically increase the quality and access to medicines and medical treatment to the entire Indonesian population. From policymakers to healthcare providers, drug manufacturers to distributors, all stakeholders in Indonesia’s healthcare and pharmaceutical sector are now facing the critical task of defining their role within this changing environment.

Unlike some of Indonesia’s local pharmaceutical companies, which largely dominate the market, most multinational companies (MNCs) do not expect to play a major role within BPJS. Despite the vast volume, tapping into BPJS will not be easy or cheap for local manufacturers either. Not only are they required to ramp up manufacturing capacity to serve a growing market, but permits to manufacture have become stricter than ever. Indonesia is one of the Pharmaceutical Inspection Convention and Pharmaceutical Inspection Co-operation Scheme (jointly referred to as PIC/S) countries, so GMP compliance is a must.

Increasingly important within Indonesia’s changing pharmaceutical landscape is the role of the distributor. Not only will distributors play a key role in making universal healthcare coverage a reality by physically making medical devices and medicines available across Indonesia’s complex geography, they will also play an essential role in identifying where and how the market will benefit from BPJS by providing the manufacturer with the latest data from the field.

Promising macro-economic data, exponential growth rates, demographic potential, and a growing middle class have drawn Indonesia into the international spotlight, earning a place among the world’s ‘pharmerging’ countries. Executives should not stare themselves blind on the double-digit growth rate however. Indonesia remains a market where both MNCs and local pharmaceutical companies can enjoy steep growth curves provided they are willing to invest in the long run. These long term investments can take on various formats, including manufacturing, partnering, and brand building. All will be important centers of change as Indonesia moves towards universal healthcare coverage.



Indonesia’s pharmaceutical industry is looking forward to January 1, 2014 and the implementation of universal healthcare. Implementation ends an era of uncertainty around the government’s commitment to launch proper coverage for all. Assigned as the chairman for the implementation of universal healthcare coverage in Indonesia is the country’s Vice Minister of Health, Mukti Ali Ghufrom. Apart from involving key stakeholders, which includes the support from the House of Representatives, and creating public awareness, Ghufron and his team define government commitment as a key success factor to a successful implementation. “From a legal point of view, a law has already been formulated and launched. We have created a roadmap, together with all stakeholders, including the unions and the Chamber of Commerce, for the successful implementation of the plan. From a financial point of view, a budget has already been agreed upon: for 2014, an amount of IDR 1.75 trillion (USD 1.7 billion) will be provided to cover the poor and the ‘near poor’,” he says.

Concerns of the Ministry of Health over the poor state of Indonesia’s healthcare facilities have encouraged the government to focus on increasing access to care and to increase the quality of care at the same time. “As the Minister of Health, my main concern is the quality of our healthcare services. It would not make sense to provide healthcare to everyone in the country if its quality is poor,” said Minister of Health, Nafsiah Mboi. “So far, we have been preparing rigorously to improve the quality of care. For healthcare facilities, our vision is a very strong primary care network combined with a good quality referral system.”

According to the Ministry, Indonesia now has roughly 9,500 primary care centers or one for every 30,000 people. “Although these numbers match the required standards, we need to work on improving the quality at primary care level,” says Mboi. “In terms of hospital care we now have 2,138 hospitals, 829 which are government owned, across the country. These hospitals have standards and accreditation which guarantee the quality of care that we need.”

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